By Troy Hooper
Only nine technology companies have gone public this year. But this isn’t due to a lack of candidates.
There are at least 100 high-caliber tech companies capable of going public that have thus far stayed private thanks to the deep and increasingly diverse pools of late-stage private capital available to them, according to Doug Chu, co-head of listings at the New York Stock Exchange.
Similar to last year, 2017 is shaping up to be a down year for listings, Chu says. Anywhere between 20 and 35 tech IPOs are expected this year compared to an average in the mid-40s typical of previous years, according to Chu and other panelists at the Mergermarket Technology Forum in San Francisco last week.
The types of tech companies eyeing an initial public offering, however, have moved beyond enterprise software, which largely dominated listings in 2016. More consumer-facing tech companies are weighing IPOs, he and the other panelists pointed out.
Blue Apron, Rent The Runway, Stitchfix and The RealReal are among some of the largest players in e-commerce contemplating IPOs this year, according to previous Mergermarket reports.
In fact, this is “an unprecedented time” in terms of the number of IPO-ready tech companies, in the eyes of Derek Dillon, US-based managing director and head of capital markets for Mizuho Securities.
Dillon sees dozens of companies with top management teams and smart business models that generate $100 million or more in annual revenues and have growth rates in excess of 30%. Many of them have a pathway to becoming cash-flow positive or profitable, to boot. Yet most of them are biding their time in the private markets where they can easily raise funds from venture capitalists, private equity firms, sovereign wealth funds, strategic players, and a growing number of other resources.